Jan
27
Overview on Mortgage
Filed Under mortgage | Comments Off
Brayan Peter asked:
A mortgage is the pledging of a property to a lender as a security for a mortgage loan. In other words, the mortgage is a security for the loan that the lender makes to the borrower. In some countries, like Spain, United Kingdom, Australia, and United States the demand for home ownership is highest. The term mortgage comes from the old French “dead pledge” which means that the pledge ends when the property is taken through foreclosure. The cost to the borrower can be measured by annual percentage rate (APR) or lender police effective annual rate (LPEAR). There are several reasons for an investor to borrow funds. One reason being to diversify investments. Invest the borrowed funds at a higher rate of interest than the borrowing rates.
There are two types of Birmingham mortgage - repayment or interest mortgages. Repayment mortgage means that the monthly repayments consist of repaying the capital amount borrowed as well as the accrued interest. In repayment mortgage the loan decreases over time, and once the last payment is done the property is yours. Repayment mortgage is the most popular type of mortgage, and many people opt for this because it is more straightforward and they do not have to worry about additional investments in order to clear the loan at the end of the mortgage term. With repayment mortgages, the entire mortgage is paid back over an agreed period of time. This is referred to as the mortgage’s term and is usually set at 25 years. Repayment mortgages are regarded as the safest option, hence their appeal to the more cautious investor. The value of investment plans can go down as well as up and are not guaranteed upon maturity. This makes an interest only mortgage a more risky option than a repayment mortgage.
Some lenders have stopped offering interest only mortgages. The benefit with interest only mortgages is that the monthly repayments are lower than the repayment mortgages. In interest only mortgage, repayments will be paying only the interest on the loan, which means that at the end of the mortgage tenure you need to find some other means by which you pay off the actual loan balance. An interest only mortgage is one where the repayments are made up entirely of the interest on the loan. When the mortgage term is complete, the capital originally borrowed is still outstanding. To cover the balance, borrowers are advised to make regular contributions into an investment policy alongside their mortgage repayments. This can be arranged by the mortgage provider, most commonly in the form of an endowment mortgage, an ISA mortgage or a pension mortgage. in certain regions like
Learn The Basics Of Painting
A mortgage is the pledging of a property to a lender as a security for a mortgage loan. In other words, the mortgage is a security for the loan that the lender makes to the borrower. In some countries, like Spain, United Kingdom, Australia, and United States the demand for home ownership is highest. The term mortgage comes from the old French “dead pledge” which means that the pledge ends when the property is taken through foreclosure. The cost to the borrower can be measured by annual percentage rate (APR) or lender police effective annual rate (LPEAR). There are several reasons for an investor to borrow funds. One reason being to diversify investments. Invest the borrowed funds at a higher rate of interest than the borrowing rates.
There are two types of Birmingham mortgage - repayment or interest mortgages. Repayment mortgage means that the monthly repayments consist of repaying the capital amount borrowed as well as the accrued interest. In repayment mortgage the loan decreases over time, and once the last payment is done the property is yours. Repayment mortgage is the most popular type of mortgage, and many people opt for this because it is more straightforward and they do not have to worry about additional investments in order to clear the loan at the end of the mortgage term. With repayment mortgages, the entire mortgage is paid back over an agreed period of time. This is referred to as the mortgage’s term and is usually set at 25 years. Repayment mortgages are regarded as the safest option, hence their appeal to the more cautious investor. The value of investment plans can go down as well as up and are not guaranteed upon maturity. This makes an interest only mortgage a more risky option than a repayment mortgage.
Some lenders have stopped offering interest only mortgages. The benefit with interest only mortgages is that the monthly repayments are lower than the repayment mortgages. In interest only mortgage, repayments will be paying only the interest on the loan, which means that at the end of the mortgage tenure you need to find some other means by which you pay off the actual loan balance. An interest only mortgage is one where the repayments are made up entirely of the interest on the loan. When the mortgage term is complete, the capital originally borrowed is still outstanding. To cover the balance, borrowers are advised to make regular contributions into an investment policy alongside their mortgage repayments. This can be arranged by the mortgage provider, most commonly in the form of an endowment mortgage, an ISA mortgage or a pension mortgage. in certain regions like
Learn The Basics Of Painting
Jan
25
How to Compare Mortgage Brokers
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Shawn Thomas asked:
Choosing the right mortgage broker is important, as you want to make sure you save as much money as possible on the mortgage loan that you take out. Being picky about your mortgage broker is more than just a matter of trying to save a few dollars, though – the right mortgage broker will also help ensure that you get the best loan terms available to you, and that you will have someone that you can work with should any changes need to be made to your mortgage loan’s terms. Comparing mortgage brokers is not difficult, but it does require that you have a basic knowledge of what to look for in the mortgage loans that the different brokerages offer to you.
It is important that you understand exactly what a mortgage broker is, of course; unlike a traditional bank or mortgage lender who will offer you a mortgage loan directly, a mortgage broker will pair you with a lender that meets your needs and will act as an intermediary between you and the lender. Because of this you can often get a better deal on a mortgage through a broker than you would be able to directly, since they can do the “shopping around” for you. Different mortgage brokers may offer different rates and terms on the loans that they find for you, however, so it is still important to shop around and compare brokerages before choosing the one that is best for you.
Before you start to compare mortgage brokers, take the time to research the basics of mortgage loans online. Not only will this give you some useful information that can be used as a basis for your comparisons, but you may also be able to learn about mortgage options that you did not know about previously. This does not mean that you have to learn everything that there is about mortgage loans, of course; simply try to cover the basics of loan options, opening and closing costs, and interest rate plans. You may also wish to take the time to find out what the average interest rates in your area are as well as nationwide so that you will have a better idea of how good of a deal the rates that you are being offered are.
Once you have a basic grasp of the mortgage lending process, start looking for mortgage brokers who operate in your area. You should be able to find several using your local telephone directory or internet listings. The more mortgage brokerages there are in your area then the greater your chances will be of finding a good deal on the mortgage loan that you take out, since you will have a number of different options to choose from. Begin contacting each of the brokers that you find and request average interest rate and loan term quotes from each.
When you have collected quotes from a number of different mortgage brokers it is time to begin your comparison. Sort the quotes by the interest rate that is being charged, but make sure that interest is not the only factor that you look at. In addition to the interest rate that you have to pay there may be a number of other costs which can affect how good of a deal a particular mortgage is, and the terms of one mortgage offer may not be as flexible as those of another. Sorting quotes based on interest will at least give you an idea of where the various offers stand based on one of the most obvious factors of the mortgage, however, and can also make it easy to eliminate the offerings of any broker whose rates are much higher than the others.
You may also list the points next to each loan’s interest rate. Points are a percentage of the loan you pay either at closing or rolled into the mortgage principal that acts as a “buy down” of the interest rate. For example, a rate that is 1% lower than a comparable loan may have 1 to 3 points attached to it whereas loan number two has zero points. Depending on the amount you are borrowing, one of these loans may be less expensive than the other. Your particular situation will determine which has the lower overall cost.
Begin comparing the quotes that you have received based on the estimated monthly payments you will have to make, opening and closing costs, and any specialized terms or conditions that certain mortgage quotes might have. Read through the quotes of the mortgage brokers several times to make sure that you have all of the information that you need for your comparison, and begin removing quotes from consideration when you find them to be more expensive or to have more strict terms than some of the other quotes. Continue reducing your potential mortgage loan quotes until only two or three remain so that you can compare them more closely before choosing a mortgage broker. Once you have finished the comparison you should have an idea of the broker who will find you the best deal on your mortgage so that you can then begin the process of getting the exact loan that is right for you.
Triple Scented Jar Candles
Choosing the right mortgage broker is important, as you want to make sure you save as much money as possible on the mortgage loan that you take out. Being picky about your mortgage broker is more than just a matter of trying to save a few dollars, though – the right mortgage broker will also help ensure that you get the best loan terms available to you, and that you will have someone that you can work with should any changes need to be made to your mortgage loan’s terms. Comparing mortgage brokers is not difficult, but it does require that you have a basic knowledge of what to look for in the mortgage loans that the different brokerages offer to you.
It is important that you understand exactly what a mortgage broker is, of course; unlike a traditional bank or mortgage lender who will offer you a mortgage loan directly, a mortgage broker will pair you with a lender that meets your needs and will act as an intermediary between you and the lender. Because of this you can often get a better deal on a mortgage through a broker than you would be able to directly, since they can do the “shopping around” for you. Different mortgage brokers may offer different rates and terms on the loans that they find for you, however, so it is still important to shop around and compare brokerages before choosing the one that is best for you.
Before you start to compare mortgage brokers, take the time to research the basics of mortgage loans online. Not only will this give you some useful information that can be used as a basis for your comparisons, but you may also be able to learn about mortgage options that you did not know about previously. This does not mean that you have to learn everything that there is about mortgage loans, of course; simply try to cover the basics of loan options, opening and closing costs, and interest rate plans. You may also wish to take the time to find out what the average interest rates in your area are as well as nationwide so that you will have a better idea of how good of a deal the rates that you are being offered are.
Once you have a basic grasp of the mortgage lending process, start looking for mortgage brokers who operate in your area. You should be able to find several using your local telephone directory or internet listings. The more mortgage brokerages there are in your area then the greater your chances will be of finding a good deal on the mortgage loan that you take out, since you will have a number of different options to choose from. Begin contacting each of the brokers that you find and request average interest rate and loan term quotes from each.
When you have collected quotes from a number of different mortgage brokers it is time to begin your comparison. Sort the quotes by the interest rate that is being charged, but make sure that interest is not the only factor that you look at. In addition to the interest rate that you have to pay there may be a number of other costs which can affect how good of a deal a particular mortgage is, and the terms of one mortgage offer may not be as flexible as those of another. Sorting quotes based on interest will at least give you an idea of where the various offers stand based on one of the most obvious factors of the mortgage, however, and can also make it easy to eliminate the offerings of any broker whose rates are much higher than the others.
You may also list the points next to each loan’s interest rate. Points are a percentage of the loan you pay either at closing or rolled into the mortgage principal that acts as a “buy down” of the interest rate. For example, a rate that is 1% lower than a comparable loan may have 1 to 3 points attached to it whereas loan number two has zero points. Depending on the amount you are borrowing, one of these loans may be less expensive than the other. Your particular situation will determine which has the lower overall cost.
Begin comparing the quotes that you have received based on the estimated monthly payments you will have to make, opening and closing costs, and any specialized terms or conditions that certain mortgage quotes might have. Read through the quotes of the mortgage brokers several times to make sure that you have all of the information that you need for your comparison, and begin removing quotes from consideration when you find them to be more expensive or to have more strict terms than some of the other quotes. Continue reducing your potential mortgage loan quotes until only two or three remain so that you can compare them more closely before choosing a mortgage broker. Once you have finished the comparison you should have an idea of the broker who will find you the best deal on your mortgage so that you can then begin the process of getting the exact loan that is right for you.
Triple Scented Jar Candles
Jan
23
Reverse Mortgage FAQs
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justin narin asked:
is a reverse mortgage?
A reverse mortgage is a loan product that allows homeowners 62 years of age and older to use their equity to generate tax-free income, without having to sell the home or take on a new mortgage payment. In fact the reverse mortgage is exactly what the title states, the reverse of a standard mortgage.
How is a reverse mortgage different from a standard mortgage?
With a standard mortgage, the borrower (or homeowner) makes monthly payments to the lender (or bank or mortgage company), in order to pay back the loan that the lender originally lent to for the purchase or refinance of the house. This payment includes interest that the lender charges the borrower for the loan. In a reverse mortgage, the situation is reversed; the lender makes monthly payments to the borrower. However, in both a standard and reverse mortgage, the lender secures their loan amount by using the house as collateral.
Do I make monthly payments on a reverse mortgage?
No monthly payments are due on the loan and the loan is repaid when the moves or sells the home, passes away, or ownership otherwise changes hands
What factors determine the amount of the reverse mortgage?
There are a few factors that determine how much money a borrower will receive from a reverse mortgage, such as the value of the home, borrower’s (and co-borrower’s) age, current interest rates and any lending limits that may be standard for your geographic area. As a rule of thumb, the older the borrower and the more valuable the home, the larger the available loan amount.
What can we use a reverse mortgage for?
The proceeds from the reverse mortgage can be used for anything, completely at the discretion of the borrower, though most borrowers use the funds for home repairs or modifications, health care expenses, to settle other debts, or for their long-planned vacation! Reverse mortgages are available for nearly all property types with the exception of co-ops, though co-op owners in some metropolitan areas, specifically New York, should have local options.
Can I receive a lump sum payment from a reverse mortgage?
Homeowners can choose how they want to receive their payments, either as a lump sum, monthly payments or as a line of credit. The line of credit is the most popular option, with nearly 60% of reverse mortgage borrowers choosing to the option to draw income or a lump sum off the line at the time of their choosing.
What happens if I decide to sell my house?
If the home is sold and the proceeds of the sale exceed the mortgage amount, the balance belongs to the borrower or their heirs.
What happens to my existing mortgage?
For reverse mortgage borrowers with an existing mortgage, that mortgage will need to be paid off completely, so that the new reverse mortgage will be the only lien on the house. If the proceeds from the reverse mortgage are not ample to pay off the existing mortgage, the borrower will need to access savings or other sources to pay off the rest of existing mortgage amount. In this scenario, the borrower won’t have access to any additional funds from the reverse mortgage; however, they will no longer have a mortgage payment!
Can I get expert advice before I get a reverse mortgage?
One very important facet of the reverse mortgage process is the consumer counseling that is required for borrowers contemplating a reverse mortgage. Your lender can help you find counseling agencies and most programs are approved and monitored by HUD and/ or A A R P. The counseling is required to make sure that the terms and risks of the program are clear to you. Counselors are obligated by law to review with you all of the implications of the new mortgage, and what your potential options are.
For more articles on Reverse Mortgage, visit: http://www.bills.com/reversemortgage
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is a reverse mortgage?
A reverse mortgage is a loan product that allows homeowners 62 years of age and older to use their equity to generate tax-free income, without having to sell the home or take on a new mortgage payment. In fact the reverse mortgage is exactly what the title states, the reverse of a standard mortgage.
How is a reverse mortgage different from a standard mortgage?
With a standard mortgage, the borrower (or homeowner) makes monthly payments to the lender (or bank or mortgage company), in order to pay back the loan that the lender originally lent to for the purchase or refinance of the house. This payment includes interest that the lender charges the borrower for the loan. In a reverse mortgage, the situation is reversed; the lender makes monthly payments to the borrower. However, in both a standard and reverse mortgage, the lender secures their loan amount by using the house as collateral.
Do I make monthly payments on a reverse mortgage?
No monthly payments are due on the loan and the loan is repaid when the moves or sells the home, passes away, or ownership otherwise changes hands
What factors determine the amount of the reverse mortgage?
There are a few factors that determine how much money a borrower will receive from a reverse mortgage, such as the value of the home, borrower’s (and co-borrower’s) age, current interest rates and any lending limits that may be standard for your geographic area. As a rule of thumb, the older the borrower and the more valuable the home, the larger the available loan amount.
What can we use a reverse mortgage for?
The proceeds from the reverse mortgage can be used for anything, completely at the discretion of the borrower, though most borrowers use the funds for home repairs or modifications, health care expenses, to settle other debts, or for their long-planned vacation! Reverse mortgages are available for nearly all property types with the exception of co-ops, though co-op owners in some metropolitan areas, specifically New York, should have local options.
Can I receive a lump sum payment from a reverse mortgage?
Homeowners can choose how they want to receive their payments, either as a lump sum, monthly payments or as a line of credit. The line of credit is the most popular option, with nearly 60% of reverse mortgage borrowers choosing to the option to draw income or a lump sum off the line at the time of their choosing.
What happens if I decide to sell my house?
If the home is sold and the proceeds of the sale exceed the mortgage amount, the balance belongs to the borrower or their heirs.
What happens to my existing mortgage?
For reverse mortgage borrowers with an existing mortgage, that mortgage will need to be paid off completely, so that the new reverse mortgage will be the only lien on the house. If the proceeds from the reverse mortgage are not ample to pay off the existing mortgage, the borrower will need to access savings or other sources to pay off the rest of existing mortgage amount. In this scenario, the borrower won’t have access to any additional funds from the reverse mortgage; however, they will no longer have a mortgage payment!
Can I get expert advice before I get a reverse mortgage?
One very important facet of the reverse mortgage process is the consumer counseling that is required for borrowers contemplating a reverse mortgage. Your lender can help you find counseling agencies and most programs are approved and monitored by HUD and/ or A A R P. The counseling is required to make sure that the terms and risks of the program are clear to you. Counselors are obligated by law to review with you all of the implications of the new mortgage, and what your potential options are.
For more articles on Reverse Mortgage, visit: http://www.bills.com/reversemortgage
Collectable Kitchen Plates
Jan
23
Poor Credit Mortgage Refinancing
Filed Under mortgage | Comments Off
melinamenny asked:
Poor Credit Mortgage Refinancing - What You Need To Know
If you own your own home but you don’t have the credit rating you’d like to, you still have lots of refinancing options available. With more and more lenders joining the mortgage market each day, there are hundreds of loan products and lenders ready to meet your poor credit mortgage refinancing needs immediately.
Find a mortgage broker
One of the easiest ways to find the refinance loan you need is to use a mortgage broker. A mortgage broker works with a variety of different lenders in order to secure your mortgage refinancing. Most mortgage brokers work with many different finance companies with a wide variety of choices, so they almost always have a few poor credit mortgage lenders on their file list.
The advantage of using a mortgage broker is that the heavy duty work is off your plate – you only need to fill out one application, and the broker does all the work from there. Only one credit check is performed, so you don’t have to worry about several lenders pulling your credit record at once.
As you try to choose the right mortgage broker to meet your needs, be sure that you consider the following. Find a broker who works with several loan companies so you’ll have a better chance at getting the loan product that meets your needs. As about the availability of Good Faith Estimates with each quote, and be sure to ask about the timeline to close with each offer. Finally, make sure your broker is available to answer all of your questions.
Once the mortgage broker has your information and application, he or she will submit it to their lending companies, and you’ll probably have several offers on your hands. The offers will consist of the interest rate being offered to you and the terms of the refinancing.
Exploring Your Loan Options
Refinancing your mortgage is essentially the process of replacing your first loan, and that means you can expect to see lots of different mortgage options. Looking carefully at loan types before you apply with a mortgage broker or lender is a great way to help sort through the offers available.
Fixed Rate Loans
Fixed rate mortgages are those that have one interest rate throughout the entire life of the loan. That means that you can expect one payment amount every single month. A great tool for people on a tight budget, a fixed rate mortgage is a predictable way to meet your housing needs. These kinds of loans usually come in fifteen, twenty, and thirty year loans, but there are other fixed rate mortgage options, so examine them carefully before you make your final choice.
Adjustable Rate Loans
Adjustable rate mortgages have interest rates that can change during the life of the loan. In most cases, an adjustable rate mortgage can adjust every one, three, five, or seven years. If the market rates go up during your adjustment period, you can expect your house payment to increase as well. Should the market rates fall during any given adjustment period, your house payments will also decrease. Most of these kinds of loans have an adjustment period cap on them to ensure your payment doesn’t change too much during any given adjustment cycle.
Within the world of adjustable rate mortgages, there are lots of different kinds of loans. Interest-only loans allow you to pay just the interest on your loan during the first five years. This is a great way to save money if you expect your salary to increase after the first few years of owning your home. Fifty year mortgages allow you to stretch your repayment period to as long as fifty years, and that can help you get in the house you truly want. Talk with your lender about the adjustable rate mortgage that might best fit your refinancing needs.
Cash-out Refinancing
In addition to getting different traditional mortgages, you can also turn the equity into cash during the mortgage refinance process. The equity in your home is the difference between your home’s value and what you currently owe on the loan. For example, if your home is worth $150,000, but you only owe $80,000, you have $70,000 of equity in your home that you can turn into cash during poor credit mortgage refinancing.
Getting the Best Rate
If you do end up with a significantly higher interest rate than you’d like to see, you can increase your credit rating. Paying your mortgage payments on time is a good way to raise your credit rating – every mortgage lender reports to the three major credit bureaus often. The three main credit bureaus are Experian, TransUnion and Equifax – if you’re unsure of your credit history and rating and why it is ‘poor’, ask for your free copy of your credit report from each of the agencies. You generally get one free report each year from each bureau and you should take advantage of this – check out your credit record for discrepancies and errors that could cause your credit rating to plummet.
These reports are what your mortgage broker, and the lenders applied to for your mortgage refinancing, will see. Once you’re aware of the problem, you can begin changing your budgeting lifestyle to correct the issues.
Finding Mortgage Refinancing is easy when you work with a mortgage broker instead of tackling the lenders head on themselves. It’s not a bad idea to go ahead and check out some of the online poor credit mortgage refinancing lenders as well on your own, so you can see if their rates are better than the ones your broker offered you. Sometimes the knowledge that there are other offers on the table with lower interest rates will encourage more refinancing lenders to reconsider your application and offer a better rate, just to get your business.
Using a mortgage broker is free for borrowers – they are paid in points from the financing companies that they place business with. Talk to a mortgage broker about your poor credit and your situation and see if they are able to help you. There are plenty of mortgage brokers available throughout the country, so finding one that is willing to help you find poor credit mortgage refinancing shouldn’t be a problem.
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Poor Credit Mortgage Refinancing - What You Need To Know
If you own your own home but you don’t have the credit rating you’d like to, you still have lots of refinancing options available. With more and more lenders joining the mortgage market each day, there are hundreds of loan products and lenders ready to meet your poor credit mortgage refinancing needs immediately.
Find a mortgage broker
One of the easiest ways to find the refinance loan you need is to use a mortgage broker. A mortgage broker works with a variety of different lenders in order to secure your mortgage refinancing. Most mortgage brokers work with many different finance companies with a wide variety of choices, so they almost always have a few poor credit mortgage lenders on their file list.
The advantage of using a mortgage broker is that the heavy duty work is off your plate – you only need to fill out one application, and the broker does all the work from there. Only one credit check is performed, so you don’t have to worry about several lenders pulling your credit record at once.
As you try to choose the right mortgage broker to meet your needs, be sure that you consider the following. Find a broker who works with several loan companies so you’ll have a better chance at getting the loan product that meets your needs. As about the availability of Good Faith Estimates with each quote, and be sure to ask about the timeline to close with each offer. Finally, make sure your broker is available to answer all of your questions.
Once the mortgage broker has your information and application, he or she will submit it to their lending companies, and you’ll probably have several offers on your hands. The offers will consist of the interest rate being offered to you and the terms of the refinancing.
Exploring Your Loan Options
Refinancing your mortgage is essentially the process of replacing your first loan, and that means you can expect to see lots of different mortgage options. Looking carefully at loan types before you apply with a mortgage broker or lender is a great way to help sort through the offers available.
Fixed Rate Loans
Fixed rate mortgages are those that have one interest rate throughout the entire life of the loan. That means that you can expect one payment amount every single month. A great tool for people on a tight budget, a fixed rate mortgage is a predictable way to meet your housing needs. These kinds of loans usually come in fifteen, twenty, and thirty year loans, but there are other fixed rate mortgage options, so examine them carefully before you make your final choice.
Adjustable Rate Loans
Adjustable rate mortgages have interest rates that can change during the life of the loan. In most cases, an adjustable rate mortgage can adjust every one, three, five, or seven years. If the market rates go up during your adjustment period, you can expect your house payment to increase as well. Should the market rates fall during any given adjustment period, your house payments will also decrease. Most of these kinds of loans have an adjustment period cap on them to ensure your payment doesn’t change too much during any given adjustment cycle.
Within the world of adjustable rate mortgages, there are lots of different kinds of loans. Interest-only loans allow you to pay just the interest on your loan during the first five years. This is a great way to save money if you expect your salary to increase after the first few years of owning your home. Fifty year mortgages allow you to stretch your repayment period to as long as fifty years, and that can help you get in the house you truly want. Talk with your lender about the adjustable rate mortgage that might best fit your refinancing needs.
Cash-out Refinancing
In addition to getting different traditional mortgages, you can also turn the equity into cash during the mortgage refinance process. The equity in your home is the difference between your home’s value and what you currently owe on the loan. For example, if your home is worth $150,000, but you only owe $80,000, you have $70,000 of equity in your home that you can turn into cash during poor credit mortgage refinancing.
Getting the Best Rate
If you do end up with a significantly higher interest rate than you’d like to see, you can increase your credit rating. Paying your mortgage payments on time is a good way to raise your credit rating – every mortgage lender reports to the three major credit bureaus often. The three main credit bureaus are Experian, TransUnion and Equifax – if you’re unsure of your credit history and rating and why it is ‘poor’, ask for your free copy of your credit report from each of the agencies. You generally get one free report each year from each bureau and you should take advantage of this – check out your credit record for discrepancies and errors that could cause your credit rating to plummet.
These reports are what your mortgage broker, and the lenders applied to for your mortgage refinancing, will see. Once you’re aware of the problem, you can begin changing your budgeting lifestyle to correct the issues.
Finding Mortgage Refinancing is easy when you work with a mortgage broker instead of tackling the lenders head on themselves. It’s not a bad idea to go ahead and check out some of the online poor credit mortgage refinancing lenders as well on your own, so you can see if their rates are better than the ones your broker offered you. Sometimes the knowledge that there are other offers on the table with lower interest rates will encourage more refinancing lenders to reconsider your application and offer a better rate, just to get your business.
Using a mortgage broker is free for borrowers – they are paid in points from the financing companies that they place business with. Talk to a mortgage broker about your poor credit and your situation and see if they are able to help you. There are plenty of mortgage brokers available throughout the country, so finding one that is willing to help you find poor credit mortgage refinancing shouldn’t be a problem.
Eagle Claw Fishing Rods
Jan
20
How to Determine Which Kind of Mortgage is Best for You
Filed Under mortgage | Comments Off
Brian Jenkins asked:
As everyone knows, buying a home is stressful and one of the most important decisions that one has to make is what kind of mortgage to get. Choosing the mortgage that works best for you and addresses your specific needs can potentially save -or cost you -thousands of dollars over the length of the mortgage.
Perhaps the biggest decision is whether to take a fixed rate (FRM) or an adjustable (ARM) mortgage. A fixed rate mortgage is just that -the interest rate on your loan will not change even if interest rates go up or down. An adjustable rate mortgage will go up or down, depending on the prevailing interest rate at the time. It all depends on the state of the economy, your personal and financial situation and just how much of a risk you want to take. Around 70% of all mortgages are fixed rate.
A fixed rate mortgage offers stability -you do not need to worry about your monthly payment going up, although you may be missing out on a better rate. An adjustable rate mortgage carries an interest rate that is connected to the prevailing market rate -the monthly mortgage payment will be more or less, depending on what the market rate is doing. An adjustable rate mortgage does offer some safeguard - there may be a limit on the amount the rate can change during a certain period; there may also be a limit on the amount that rates can be increased over the length of the loan.
A change in the interest rate can mean a big difference in how much you pay for your home. An interest rate of just one point less can mean a savings of around $50,000 on the average thirty-year mortgage and around $5,000 on the average 15-year mortgage. In addition, an increase in the interest rate of just one or two percent can mean monthly payments that are between $50 and $250 higher. Another option is to take out the fixed rate mortgage and then re-finance if interest rates go lower.
The length or term of the mortgage is also important. Most home buyers opt for the traditional 15 or 30 year mortgage, but it is also possible to take out a mortgage that is 10, 25 or even 40 years. It all depends on how much you can afford to pay each month and how quickly you want to own your home outright -obviously, the shorter the term of the mortgage, the higher your monthly payments are.
It is also possible to take out a 30-year mortgage and when you can afford it, pay more towards the principal, thus making the term shorter. Simply making an extra payment a month will significantly reduce the term of the mortgage -as well as saving a substantial amount in interest charges. If you pay extra, make sure the payment is going towards the principal, rather than the interest.
There are some other options available. An option adjustable rate loan has an interest rate that adjusts every month -it allows homebuyers to enjoy lower monthly payment amounts at first and then to make higher payments later, when they can better afford it. A so-called balloon mortgage offers a payment schedule similar to the traditional 30 year mortgage -but with a shorter term of up to seven years. At the end of the term, the buyer must pay the outstanding balance.
You may also be eligible for an FHA (Federal Housing Authority) loan -a fixed rate mortgage that is designed for home buyers with a low income or poor credit, who are buying a home for the first time. An FHA loan usually requires less of a down payment and offesr a lower interest rate than a regular mortgage. An FHA mortgage loan is also secured to the lender in the event of default by the purchaser.
Another option is a VA (Veteran’s Affairs) mortgage, which applies to buyers who have experience of serving in the military, as well as a surviving spouse. VA loans have several advantages - it’s possible to get a mortgage with little or no down payment, the loans are assumable and there is no penalty for prepaying the loan. However there is a maximum loan amount - in most states this is $417,000 -and you still have to qualify as far as income and credit are concerned.
Your home is probably the biggest single purchase you will make. It is worth taking the time to find the mortgage option that works best for you. The types of mortgages that are available all affect your payments differently. The type of mortgage chosen mostly depends on personal income and the length of time in which you are looking to pay for the mortgage.
Custom Closet Doors
As everyone knows, buying a home is stressful and one of the most important decisions that one has to make is what kind of mortgage to get. Choosing the mortgage that works best for you and addresses your specific needs can potentially save -or cost you -thousands of dollars over the length of the mortgage.
Perhaps the biggest decision is whether to take a fixed rate (FRM) or an adjustable (ARM) mortgage. A fixed rate mortgage is just that -the interest rate on your loan will not change even if interest rates go up or down. An adjustable rate mortgage will go up or down, depending on the prevailing interest rate at the time. It all depends on the state of the economy, your personal and financial situation and just how much of a risk you want to take. Around 70% of all mortgages are fixed rate.
A fixed rate mortgage offers stability -you do not need to worry about your monthly payment going up, although you may be missing out on a better rate. An adjustable rate mortgage carries an interest rate that is connected to the prevailing market rate -the monthly mortgage payment will be more or less, depending on what the market rate is doing. An adjustable rate mortgage does offer some safeguard - there may be a limit on the amount the rate can change during a certain period; there may also be a limit on the amount that rates can be increased over the length of the loan.
A change in the interest rate can mean a big difference in how much you pay for your home. An interest rate of just one point less can mean a savings of around $50,000 on the average thirty-year mortgage and around $5,000 on the average 15-year mortgage. In addition, an increase in the interest rate of just one or two percent can mean monthly payments that are between $50 and $250 higher. Another option is to take out the fixed rate mortgage and then re-finance if interest rates go lower.
The length or term of the mortgage is also important. Most home buyers opt for the traditional 15 or 30 year mortgage, but it is also possible to take out a mortgage that is 10, 25 or even 40 years. It all depends on how much you can afford to pay each month and how quickly you want to own your home outright -obviously, the shorter the term of the mortgage, the higher your monthly payments are.
It is also possible to take out a 30-year mortgage and when you can afford it, pay more towards the principal, thus making the term shorter. Simply making an extra payment a month will significantly reduce the term of the mortgage -as well as saving a substantial amount in interest charges. If you pay extra, make sure the payment is going towards the principal, rather than the interest.
There are some other options available. An option adjustable rate loan has an interest rate that adjusts every month -it allows homebuyers to enjoy lower monthly payment amounts at first and then to make higher payments later, when they can better afford it. A so-called balloon mortgage offers a payment schedule similar to the traditional 30 year mortgage -but with a shorter term of up to seven years. At the end of the term, the buyer must pay the outstanding balance.
You may also be eligible for an FHA (Federal Housing Authority) loan -a fixed rate mortgage that is designed for home buyers with a low income or poor credit, who are buying a home for the first time. An FHA loan usually requires less of a down payment and offesr a lower interest rate than a regular mortgage. An FHA mortgage loan is also secured to the lender in the event of default by the purchaser.
Another option is a VA (Veteran’s Affairs) mortgage, which applies to buyers who have experience of serving in the military, as well as a surviving spouse. VA loans have several advantages - it’s possible to get a mortgage with little or no down payment, the loans are assumable and there is no penalty for prepaying the loan. However there is a maximum loan amount - in most states this is $417,000 -and you still have to qualify as far as income and credit are concerned.
Your home is probably the biggest single purchase you will make. It is worth taking the time to find the mortgage option that works best for you. The types of mortgages that are available all affect your payments differently. The type of mortgage chosen mostly depends on personal income and the length of time in which you are looking to pay for the mortgage.
Custom Closet Doors
Jan
16
Mortgage Loans in Pennsylvania
Filed Under mortgage | Comments Off
Brian Jenkins asked:
You’ve found a beautiful piece of property in one of the upscale areas of Pennsylvania and you’re wondering if you can get the best mortgage loan that’s available in the market.
If you’re new to the area, you might want to study the local market, meet with some real estate agents and mortgage brokers, speak to a few financial institutions and do comparison shopping for mortgage loans in Pennsylvania. Don’t be in a rush to settle for the first mortgage loan that’s offered to you. It pays to do a bit of due diligence and to acquaint yourself with local conditions. Only a reputable real estate expert can clue you into the best type of mortgage loan that will suit your budget and lifestyle.
Types of mortgage loans in Pennsylvania
Like most American states, Pennsylvania offers homebuyers many types of mortgage loans:
ARM (adjustable rate mortgage) - the one thing to remember about ARMs is that they have a low initial rate and a low payment, but they last for one, three or five years. There are different types of ARMs and are usually ideal for people with special circumstances; that is, they have varying income levels during the year and only want to engage in short term borrowing. Pennsylvania borrowers who require low mortgage payments but expect to be able to make larger payments later choose ARMs.
Fixed rate mortgage - unlike adjustable rate mortgages, fixed rate mortgages have a fixed interest rate and can go for as long as 10, 20, 25, 30 and even 40 years. This is the perfect mortgage loan for people who have steady incomes and stable jobs and want to pay a fixed amount every month. They can’t tolerate variable rate mortgages because they want to stick to their budget and want the security of one regular payment either weekly or monthly.
Interest only mortgage - this is a type of mortgage loan that is becoming popular among people who cannot afford to make payments towards the principal and interest of a mortgage loan. As the name suggests, homebuyers pay only the interest on the mortgage. This type of loan, however, cannot go on indefinitely as there is a fixed time period for making interest payments - usually five to ten years. In this type of mortgage loan, the borrowers only pay interest leaving the principal amount unchanged. This means that if you borrow $200,000.00 at 5% for 2 years, you will only pay the interest of $10,000 divided over 12 months, but your mortgage loan remains at $200,000.00, even if you choose to pay more interest than the 5%.
Fixed rate second mortgages - these are also called home equity loans. Borrowers borrow money against the equity of their first home if they have certain expenses to meet such as their children’s university education or a kitchen renovation they’ve been wanting to undertake. An alternative to a home equity loan is a refinanced mortgage, but note that home equity loans may have lower closing costs but higher interest rates.
Mortgage loans: a few pointers
When shopping for the best mortgage loan rates, consider the following:
Study the APR (annual percentage rate). This allows you to compare different mortgage loans in Pennsylvania with different closing costs; Amortization - this is important because it pays to know how the payments are applied to the debt balance over a period of time.
Term - people are tempted to stretch their mortgage loans to 30 or 35 years because monthly payments are lower. Remember, however, that while monthly payments would be lower, you could be paying higher interest rates in the end. Some people like a short mortgage - say 10 years - and while they do end up paying larger monthly amounts, they at least save on interest charges.
Low payments - be wary when a mortgage lender offers you very low payments. Consider it within the context of the amortization. While low payments may be affordable in the next 24, 36 or 48 months, the loan could cost you an arm and a leg in terms of interest. Second mortgages - remember the rule of thumb: second mortgages have higher rates than refinanced mortgages.
Before you make a final decision on the mortgage loan you’re obtaining in Pennsylvania, do some research on local mortgage lenders and compare their rates to national lenders. Find out as much as you can about the Pennsylvania housing market and lastly, compare terms and rates and convince lenders to come up with a better offer.
Heat Pump Prices
You’ve found a beautiful piece of property in one of the upscale areas of Pennsylvania and you’re wondering if you can get the best mortgage loan that’s available in the market.
If you’re new to the area, you might want to study the local market, meet with some real estate agents and mortgage brokers, speak to a few financial institutions and do comparison shopping for mortgage loans in Pennsylvania. Don’t be in a rush to settle for the first mortgage loan that’s offered to you. It pays to do a bit of due diligence and to acquaint yourself with local conditions. Only a reputable real estate expert can clue you into the best type of mortgage loan that will suit your budget and lifestyle.
Types of mortgage loans in Pennsylvania
Like most American states, Pennsylvania offers homebuyers many types of mortgage loans:
ARM (adjustable rate mortgage) - the one thing to remember about ARMs is that they have a low initial rate and a low payment, but they last for one, three or five years. There are different types of ARMs and are usually ideal for people with special circumstances; that is, they have varying income levels during the year and only want to engage in short term borrowing. Pennsylvania borrowers who require low mortgage payments but expect to be able to make larger payments later choose ARMs.
Fixed rate mortgage - unlike adjustable rate mortgages, fixed rate mortgages have a fixed interest rate and can go for as long as 10, 20, 25, 30 and even 40 years. This is the perfect mortgage loan for people who have steady incomes and stable jobs and want to pay a fixed amount every month. They can’t tolerate variable rate mortgages because they want to stick to their budget and want the security of one regular payment either weekly or monthly.
Interest only mortgage - this is a type of mortgage loan that is becoming popular among people who cannot afford to make payments towards the principal and interest of a mortgage loan. As the name suggests, homebuyers pay only the interest on the mortgage. This type of loan, however, cannot go on indefinitely as there is a fixed time period for making interest payments - usually five to ten years. In this type of mortgage loan, the borrowers only pay interest leaving the principal amount unchanged. This means that if you borrow $200,000.00 at 5% for 2 years, you will only pay the interest of $10,000 divided over 12 months, but your mortgage loan remains at $200,000.00, even if you choose to pay more interest than the 5%.
Fixed rate second mortgages - these are also called home equity loans. Borrowers borrow money against the equity of their first home if they have certain expenses to meet such as their children’s university education or a kitchen renovation they’ve been wanting to undertake. An alternative to a home equity loan is a refinanced mortgage, but note that home equity loans may have lower closing costs but higher interest rates.
Mortgage loans: a few pointers
When shopping for the best mortgage loan rates, consider the following:
Study the APR (annual percentage rate). This allows you to compare different mortgage loans in Pennsylvania with different closing costs; Amortization - this is important because it pays to know how the payments are applied to the debt balance over a period of time.
Term - people are tempted to stretch their mortgage loans to 30 or 35 years because monthly payments are lower. Remember, however, that while monthly payments would be lower, you could be paying higher interest rates in the end. Some people like a short mortgage - say 10 years - and while they do end up paying larger monthly amounts, they at least save on interest charges.
Low payments - be wary when a mortgage lender offers you very low payments. Consider it within the context of the amortization. While low payments may be affordable in the next 24, 36 or 48 months, the loan could cost you an arm and a leg in terms of interest. Second mortgages - remember the rule of thumb: second mortgages have higher rates than refinanced mortgages.
Before you make a final decision on the mortgage loan you’re obtaining in Pennsylvania, do some research on local mortgage lenders and compare their rates to national lenders. Find out as much as you can about the Pennsylvania housing market and lastly, compare terms and rates and convince lenders to come up with a better offer.
Heat Pump Prices
Jan
5
Forclosures Have Met Their Match… Reverse Mortgages
Filed Under mortgage | Comments Off
MLS Reverse Mortgage asked:
Foreclosure filings were reported on 2.3 million U.S. properties in 2008, an increase of 81 percent from 2007 and up 225 percent from 2006, according to the RealtyTrac U.S. Foreclosure Market Report released January 15, 2009. The soaring number of forclosures have sent ripples through the housing and banking industry with the affects being felt by millions.
According to RealtyTrac, California, Florida, Arizona posted the highest 2008 foreclosure totals. A total of 523,624 California properties received a foreclosure filing in 2008, the nation’s highest state total. Foreclosure activity in the state increased nearly 110 percent from 2007 and nearly 498 percent from 2006. With 385,309 properties receiving a foreclosure filing in 2008, Florida documented the second highest state total. Florida foreclosure activity increased 133 percent from 2007 and nearly 412 percent from 2006. Arizona’s 2008 total of 116,911 properties receiving a foreclosure filing was third highest among the states. Foreclosure activity in Arizona increased 203 percent from 2007 and 655 percent from 2006. Other states with Top 10 totals for 2008 were Ohio, Michigan, Illinois, Texas, Georgia, Nevada and New Jersey.
With mounting job losses and a weakening economy, forclosures and mortgage delinquencies are expected to continue to rise. The nation’s unemployment rate shot up at the end of the year, reaching 7.2 percent in December — its highest level since early 1993, according to a Labor Department report release January 9, 2009. That puts U.S. job losses at 2.6 million for 2008.
However, with all this doom and gloom in the housing market, there is a glimmer of hope for senior homeowners 62 years of age and older. That hope comes in the form of a HUD Home Equity Conversion Mortgage (HECM) or Reverse Mortgage. Those who have obtained a reverse mortgage need not be concerned with the increasing forclosure rates and whether or not they can make their mortgage payments. With a HECM reverse mortgage, there are no monthly payments required.
Borrowers remain in their homes for life and never have to worry about making a mortgage payment again. All they need to do is keep the property in good repair, pay their property taxes and keep their homeowners insurance current and paid.
For seniors who currently do not have a reverse mortgage, now may be the time to explore the option. It does not matter if a senior is currently late on their mortgage. They may still qualify for a reverse mortgage. To qualify all borrowers on title must be 62 years or older, occupy the property as their primary residence and not currently be in a bankruptcy. That’s it!
MLS Reverse Mortgage has helped save several seniors who were months away from losing their homes.
So, in these tough economic times, there is still hope for seniors looking for mortgage payment relief or cash out to enjoy life’s pleasures.
Learn more online: http://www.mlsreversemortgage.com
Insulated Vinyl Siding
Foreclosure filings were reported on 2.3 million U.S. properties in 2008, an increase of 81 percent from 2007 and up 225 percent from 2006, according to the RealtyTrac U.S. Foreclosure Market Report released January 15, 2009. The soaring number of forclosures have sent ripples through the housing and banking industry with the affects being felt by millions.
According to RealtyTrac, California, Florida, Arizona posted the highest 2008 foreclosure totals. A total of 523,624 California properties received a foreclosure filing in 2008, the nation’s highest state total. Foreclosure activity in the state increased nearly 110 percent from 2007 and nearly 498 percent from 2006. With 385,309 properties receiving a foreclosure filing in 2008, Florida documented the second highest state total. Florida foreclosure activity increased 133 percent from 2007 and nearly 412 percent from 2006. Arizona’s 2008 total of 116,911 properties receiving a foreclosure filing was third highest among the states. Foreclosure activity in Arizona increased 203 percent from 2007 and 655 percent from 2006. Other states with Top 10 totals for 2008 were Ohio, Michigan, Illinois, Texas, Georgia, Nevada and New Jersey.
With mounting job losses and a weakening economy, forclosures and mortgage delinquencies are expected to continue to rise. The nation’s unemployment rate shot up at the end of the year, reaching 7.2 percent in December — its highest level since early 1993, according to a Labor Department report release January 9, 2009. That puts U.S. job losses at 2.6 million for 2008.
However, with all this doom and gloom in the housing market, there is a glimmer of hope for senior homeowners 62 years of age and older. That hope comes in the form of a HUD Home Equity Conversion Mortgage (HECM) or Reverse Mortgage. Those who have obtained a reverse mortgage need not be concerned with the increasing forclosure rates and whether or not they can make their mortgage payments. With a HECM reverse mortgage, there are no monthly payments required.
Borrowers remain in their homes for life and never have to worry about making a mortgage payment again. All they need to do is keep the property in good repair, pay their property taxes and keep their homeowners insurance current and paid.
For seniors who currently do not have a reverse mortgage, now may be the time to explore the option. It does not matter if a senior is currently late on their mortgage. They may still qualify for a reverse mortgage. To qualify all borrowers on title must be 62 years or older, occupy the property as their primary residence and not currently be in a bankruptcy. That’s it!
MLS Reverse Mortgage has helped save several seniors who were months away from losing their homes.
So, in these tough economic times, there is still hope for seniors looking for mortgage payment relief or cash out to enjoy life’s pleasures.
Learn more online: http://www.mlsreversemortgage.com
Insulated Vinyl Siding
Jan
5
Mortgages Rules For Canadian Home Buyers to Be Tightened
Filed Under mortgage | Comments Off
Bruce Owens asked:
On July 9th, the Department of Finance moved to tighten Canada’s mortgages markets by announcing changes to the requirements for federally-backed mortgage insurance. The changes set minimum credit scores that home purchasers must meet to qualify for mortgage insurance on so-called ‘high-ratio mortgages” while restricting amortization terms to 35 years and requiring a minimum 5% down payment on mortgages insured through the Canadian Mortgage and Housing Corporation (CMHC) or other government-backed private mortgage insurers.
The tightening of Canada’s mortgage insurance rules, which will take effect on October 15th, is widely seen as a measure to further tighten Canadian mortgages market and forestall the credit problems that have crippled the U.S housing market. In announcing the changes, the Department of Finance characterized them as “a responsible and measured approach by the government to ensure Canada’s housing market remains strong and to reduce the risk of a U. S.-style housing bubble developing in Canada.”
Under the Bank Act, mortgages from federally-regulated lenders, including banks, credit unions, and caisses depots, must be insured where the value of the mortgage exceeds 80% of the value of the property or home being purchased or financed. Such high-ratio mortgages are insured primarily through the Canadian Mortgage and Housing Corporation, a federal Crown Corporation, but also through a handful of private mortgage insurers - Genworth Financial Canada, AIG and PMI Mortgage Insurance. The federal government guarantees the obligations of these mortgage insurers to lenders in the event of their not covering the costs of defaulted mortgages.
Effective October 15th, new federal rules will require that the loan-to-value ratios for federally-backed mortgages not exceed 95%, that amortization periods not exceed 35 years and that prospective borrowers have a minimum credit score of 620 and a debt service ratio (the percentage of income that goes to servicing existing debts and housing costs) of no more than 45%. The new rules will also require evidence of the reasonableness of the mortgaged property’s value and of the borrower’s source and level of income.
The new rule changes come at a time when Canadian real estate markets are already cooling off. Growth in housing prices showed a very moderate 1.1% year-over-year gain in May, according to the latest numbers from the Canadian Real Estate Association, as Canadian markets and consumer expectations have adjusted in response to the constant barrage of bad news about the worst U.S. housing market slump since the Great Depression and sobering forecasts about the state of a Canadian economy that is coming to grips with escalating energy and commodity prices.
The tightening of amortization periods and loan-to-value ratios will likely have a further dampening effect on Canadian housing markets, which already have sharply increased levels of resale and new home listings. However, this dampening effect may not be felt until after October 15th when the new rules come into effect. In the short term, the move to tighten mortgage lending standards could have the opposite effect - providing an impetus for Canadians to take the plunge into highly leveraged, no-money-down mortgages before the October 15th deadline.
(An October 15th implementation date was chosen to give home purchasers with mortgage pre-approvals the opportunity to exercise their options before the pre-approvals expire at the end of their usual 90-day term. Note, also, that the mortgages of existing home owners with high-ratio mortgages, amortization periods in excess of 35 years and substandard credit scores will be grandfathered under the new rules so that they will not be precluded from obtaining mortgage insurance when it comes time to refinance their homes.)
Industry feelings have been mixed about this latest move to ensure the solidity of Canada’s mortgages and housing markets. Most industry analysts applaud the move to ensure that Canadian home purchasers do not get sucked into the same speculative frenzy that fueled the meltdown of U.S housing prices when the sub-prime mortgage market unraveled. Other analysts seem to be expressing the view that this is a case of too-little-too-late or mere window dressing.
Derek Holt, Scotiabank’s vice president of economics, acknowledged that mortgage lending rules had been “modestly tightened” but noted that, “The changes are more about optics.” Meanwhile, a more pessimistic analysis came from BMO Nesbitt Burn’s deputy chief economist, who observed that the rule change is “a bit like closing the barn door after the horse has already run down the road.”
Canada’s mortgages and housing markets have not experienced the wild speculative bubble that erupted and burst south of our border, largely due to much more conservative lending practices here at home. Canadians were not privy to such innovative and speculative mortgage products as the so-called NINJA mortgages (”no income, no job, no assets), where borrowers could qualify for mortgages without adequate proof of income or employment that would enable then to afford the requisite mortgage payments, and only a small percentage of Canadians took out the sub-prime mortgages that scuppered U.S. markets. As a result, the percentage of Canadian mortgages in arrears are at the lowest levels - 0.27 per cent - they have been at since 1990, whereas Americans are facing mortgage foreclosures at a rate not seen since the Great Depression. This tightening of Canada’s mortgage insurance rules seem to be largely a pre-emptive move to reassure Canadian markets and ensure that Canadian home buyers do not go down the same path trodden by snake-bitten home buyers south of the border.
Bamboo Has Many Uses
On July 9th, the Department of Finance moved to tighten Canada’s mortgages markets by announcing changes to the requirements for federally-backed mortgage insurance. The changes set minimum credit scores that home purchasers must meet to qualify for mortgage insurance on so-called ‘high-ratio mortgages” while restricting amortization terms to 35 years and requiring a minimum 5% down payment on mortgages insured through the Canadian Mortgage and Housing Corporation (CMHC) or other government-backed private mortgage insurers.
The tightening of Canada’s mortgage insurance rules, which will take effect on October 15th, is widely seen as a measure to further tighten Canadian mortgages market and forestall the credit problems that have crippled the U.S housing market. In announcing the changes, the Department of Finance characterized them as “a responsible and measured approach by the government to ensure Canada’s housing market remains strong and to reduce the risk of a U. S.-style housing bubble developing in Canada.”
Under the Bank Act, mortgages from federally-regulated lenders, including banks, credit unions, and caisses depots, must be insured where the value of the mortgage exceeds 80% of the value of the property or home being purchased or financed. Such high-ratio mortgages are insured primarily through the Canadian Mortgage and Housing Corporation, a federal Crown Corporation, but also through a handful of private mortgage insurers - Genworth Financial Canada, AIG and PMI Mortgage Insurance. The federal government guarantees the obligations of these mortgage insurers to lenders in the event of their not covering the costs of defaulted mortgages.
Effective October 15th, new federal rules will require that the loan-to-value ratios for federally-backed mortgages not exceed 95%, that amortization periods not exceed 35 years and that prospective borrowers have a minimum credit score of 620 and a debt service ratio (the percentage of income that goes to servicing existing debts and housing costs) of no more than 45%. The new rules will also require evidence of the reasonableness of the mortgaged property’s value and of the borrower’s source and level of income.
The new rule changes come at a time when Canadian real estate markets are already cooling off. Growth in housing prices showed a very moderate 1.1% year-over-year gain in May, according to the latest numbers from the Canadian Real Estate Association, as Canadian markets and consumer expectations have adjusted in response to the constant barrage of bad news about the worst U.S. housing market slump since the Great Depression and sobering forecasts about the state of a Canadian economy that is coming to grips with escalating energy and commodity prices.
The tightening of amortization periods and loan-to-value ratios will likely have a further dampening effect on Canadian housing markets, which already have sharply increased levels of resale and new home listings. However, this dampening effect may not be felt until after October 15th when the new rules come into effect. In the short term, the move to tighten mortgage lending standards could have the opposite effect - providing an impetus for Canadians to take the plunge into highly leveraged, no-money-down mortgages before the October 15th deadline.
(An October 15th implementation date was chosen to give home purchasers with mortgage pre-approvals the opportunity to exercise their options before the pre-approvals expire at the end of their usual 90-day term. Note, also, that the mortgages of existing home owners with high-ratio mortgages, amortization periods in excess of 35 years and substandard credit scores will be grandfathered under the new rules so that they will not be precluded from obtaining mortgage insurance when it comes time to refinance their homes.)
Industry feelings have been mixed about this latest move to ensure the solidity of Canada’s mortgages and housing markets. Most industry analysts applaud the move to ensure that Canadian home purchasers do not get sucked into the same speculative frenzy that fueled the meltdown of U.S housing prices when the sub-prime mortgage market unraveled. Other analysts seem to be expressing the view that this is a case of too-little-too-late or mere window dressing.
Derek Holt, Scotiabank’s vice president of economics, acknowledged that mortgage lending rules had been “modestly tightened” but noted that, “The changes are more about optics.” Meanwhile, a more pessimistic analysis came from BMO Nesbitt Burn’s deputy chief economist, who observed that the rule change is “a bit like closing the barn door after the horse has already run down the road.”
Canada’s mortgages and housing markets have not experienced the wild speculative bubble that erupted and burst south of our border, largely due to much more conservative lending practices here at home. Canadians were not privy to such innovative and speculative mortgage products as the so-called NINJA mortgages (”no income, no job, no assets), where borrowers could qualify for mortgages without adequate proof of income or employment that would enable then to afford the requisite mortgage payments, and only a small percentage of Canadians took out the sub-prime mortgages that scuppered U.S. markets. As a result, the percentage of Canadian mortgages in arrears are at the lowest levels - 0.27 per cent - they have been at since 1990, whereas Americans are facing mortgage foreclosures at a rate not seen since the Great Depression. This tightening of Canada’s mortgage insurance rules seem to be largely a pre-emptive move to reassure Canadian markets and ensure that Canadian home buyers do not go down the same path trodden by snake-bitten home buyers south of the border.
Bamboo Has Many Uses
Jan
1
Reverse Mortgages: Frequently Asked Questions
Filed Under mortgage | Comments Off
Robert E. Jones asked:
1. Am I eligible for a Reverse Mortgage?
• To qualify for a reverse mortgage, you must:
• Be at least 62 years old. In the case of a couple or co-owners, both must be 62 if they want their names to be on title of the home.
• Be a homeowner with enough equity in the home.
• Seniors may qualify even if they have an outstanding balance on a mortgage.
• Single-family homes and qualified condominiums, townhouses, manufactured homes, and 2 to 4-family owner occupied residences are eligible.
• Reverse mortgages are available only for homes occupied by owners as a principal residence.
• Can own up to 4 dwellings.
2. Are Reverse Mortgages legitimate?
Yes. Reverse Mortgages are federally regulated and insured and are safer than most traditional mortgages.
3. If I get a Reverse Mortgage that means the government holds title to my home?
False. Title does not get transferred into the governments name. Throughout the life of the loan, you own your home.
4. If I decide to sell my home, will the lender make me pay back the loan and will they collect a portion of the appreciation?
False. The lender will only collect the amount that is due to them. If the loan balance is larger than the home value, the lender will only collect the proceeds from the sale. You can never owe more than what your home is worth.
5. What do I have to pay to get a Reverse Mortgage?
In most cases there are no out of pocket costs to get a Reverse Mortgage. All costs deferred and only due when the homeowner moves out permanently, sells the home or passes away.
6. What are my payment options?
You decide how to receive the money generated by a Reverse Mortgage. In general, your payment options are:
• An upfront lump sum payment.
• Line of credit.
• Fixed monthly payments for as long as you remain in your home (or a predetermined, shorter period).
• A combination of lump sum, monthly income and line of credit.
7. Are Reverse Mortgages only for desperate seniors, or for the “House Rich, Cash Poor?”
False. The Reverse Mortgage is an excellent financial planning tool that has been used by homeowners from all walks of life to enhance their retirement years. While some have needed the cash from a reverse mortgage more than others, the growing popularity of this product is evidence of its benefit in a wide array of financial circumstances.
8. Am I required to pay anything during the course of the Reverse Mortgage loan?
No. The flow of payments is reversed during the term of the Reverse Mortgage - the lending institution pays you. However, you are responsible for keeping up payments for your homeowner’s insurance and property taxes, and to maintain the condition of your home.
9. What happens when my house gets passed to my heirs?
Once your home is passed to your heirs, the Reverse Mortgage comes due. Your heirs may either pay the balance due on the reverse mortgage and keep the home, or sell the home and use the proceeds to pay off the reverse mortgage. If they sell the home, they get to keep any excess sale proceeds.
10. Can I do a Reverse Mortgage if there already is a conventional mortgage on the home?
Yes. Existing mortgages must be paid off at closing. The proceeds from the Reverse Mortgage may be used for that purpose. This will eliminate any monthly mortgage payments.
11. Can a Reverse Mortgage be closed in a living trust?
Yes. Generally this is acceptable. The complete trust documents will need to be copied and put in as part of the file.
12. Will a Reverse Mortgage affect my Social Security, Medicare or pension benefits?
No. Proceeds from a Reverse Mortgage do not affect these benefits.
13. Can I get a Reverse Mortgage from anyone?
No. Only federally approved lenders may offer HUD insured reverse mortgages. Rob Jones will close your Reverse Mortgages up to three times faster than the competition. Why not use a pioneer in the reverse mortgage profession, Sun American has over 20 years of Reverse Mortgage experience.
14. How do I get started?
Call Rob Jones at Sun American Mortgage. He will need your birth date, approximate value of your home and the amount of money remaining on your mortgage, if any.
Hands On CPR
1. Am I eligible for a Reverse Mortgage?
• To qualify for a reverse mortgage, you must:
• Be at least 62 years old. In the case of a couple or co-owners, both must be 62 if they want their names to be on title of the home.
• Be a homeowner with enough equity in the home.
• Seniors may qualify even if they have an outstanding balance on a mortgage.
• Single-family homes and qualified condominiums, townhouses, manufactured homes, and 2 to 4-family owner occupied residences are eligible.
• Reverse mortgages are available only for homes occupied by owners as a principal residence.
• Can own up to 4 dwellings.
2. Are Reverse Mortgages legitimate?
Yes. Reverse Mortgages are federally regulated and insured and are safer than most traditional mortgages.
3. If I get a Reverse Mortgage that means the government holds title to my home?
False. Title does not get transferred into the governments name. Throughout the life of the loan, you own your home.
4. If I decide to sell my home, will the lender make me pay back the loan and will they collect a portion of the appreciation?
False. The lender will only collect the amount that is due to them. If the loan balance is larger than the home value, the lender will only collect the proceeds from the sale. You can never owe more than what your home is worth.
5. What do I have to pay to get a Reverse Mortgage?
In most cases there are no out of pocket costs to get a Reverse Mortgage. All costs deferred and only due when the homeowner moves out permanently, sells the home or passes away.
6. What are my payment options?
You decide how to receive the money generated by a Reverse Mortgage. In general, your payment options are:
• An upfront lump sum payment.
• Line of credit.
• Fixed monthly payments for as long as you remain in your home (or a predetermined, shorter period).
• A combination of lump sum, monthly income and line of credit.
7. Are Reverse Mortgages only for desperate seniors, or for the “House Rich, Cash Poor?”
False. The Reverse Mortgage is an excellent financial planning tool that has been used by homeowners from all walks of life to enhance their retirement years. While some have needed the cash from a reverse mortgage more than others, the growing popularity of this product is evidence of its benefit in a wide array of financial circumstances.
8. Am I required to pay anything during the course of the Reverse Mortgage loan?
No. The flow of payments is reversed during the term of the Reverse Mortgage - the lending institution pays you. However, you are responsible for keeping up payments for your homeowner’s insurance and property taxes, and to maintain the condition of your home.
9. What happens when my house gets passed to my heirs?
Once your home is passed to your heirs, the Reverse Mortgage comes due. Your heirs may either pay the balance due on the reverse mortgage and keep the home, or sell the home and use the proceeds to pay off the reverse mortgage. If they sell the home, they get to keep any excess sale proceeds.
10. Can I do a Reverse Mortgage if there already is a conventional mortgage on the home?
Yes. Existing mortgages must be paid off at closing. The proceeds from the Reverse Mortgage may be used for that purpose. This will eliminate any monthly mortgage payments.
11. Can a Reverse Mortgage be closed in a living trust?
Yes. Generally this is acceptable. The complete trust documents will need to be copied and put in as part of the file.
12. Will a Reverse Mortgage affect my Social Security, Medicare or pension benefits?
No. Proceeds from a Reverse Mortgage do not affect these benefits.
13. Can I get a Reverse Mortgage from anyone?
No. Only federally approved lenders may offer HUD insured reverse mortgages. Rob Jones will close your Reverse Mortgages up to three times faster than the competition. Why not use a pioneer in the reverse mortgage profession, Sun American has over 20 years of Reverse Mortgage experience.
14. How do I get started?
Call Rob Jones at Sun American Mortgage. He will need your birth date, approximate value of your home and the amount of money remaining on your mortgage, if any.
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